1. NCHER Winter Legal Meeting
Washington Update
 NCHER Winter Legal Meeting
March 24, 2017

2. Impact of Recent Election
Washington, DC – and the country at large – is still digesting the recent election and many experts are still recovering after “measuring the drapes”
This isn’t entirely new – Republicans typically move away from the Washington-centric mentality (Bush selected Cabinet secretaries while leaning on a fence post in TX) and reemphasize certain priority areas
But no one knows – including the President’s own party – how and whether the new Trump Administration will be able to build a “governing coalition” over the next four years

3. Impact of Recent Election
Major jockeying by various players on who makes federal policy:
Ryan says Congress
Trump says Administration
McConnell says…it depends…and that’s what will really happen…

4. Impact of Recent Election
U.S. House has 237 Republicans and 193 Democrats, with 5 vacancies (Pompeo, Price, Mulvaney, Zinke, and Becerra)
Speaker Ryan and his leadership team can lose 21 Republicans on any vote and still carry the day (40-member Freedom Caucus)
Before 2018, watch the special elections. First one is April 18 for Rep. Price’s seat

5. Impact of Recent Election
U.S. Senate has 52 Republicans and 48 Democrats (including “Independents”)
Majority Leader McConnell can lose just 2 Republicans on any vote (demonstrated by ED Secretary Betsy DeVos’ confirmation) but needs to pick up 8 Democrats to still carry the day
In 2018: 25 Dem seats up and 9 Rep seats up including Alabama

6. Impact of Recent Election
Trump Administration has been in office for 63 days – 100 day mark is April 29, 2017
Like previous Administrations, the White House is attempting to drive the policy agenda, based on campaign promises (DPC under Bush and Obama)
Also controlling/slowing-down the hiring process for federal agencies (Stroup nominated and confirmed mid-2002). Currently, ED has Secretary, some Special Assistants to the Secretary, and benchmark teams, but little else.

7. Impact of Recent Election
Like previous Administrations, lack of policy knowledge and staff has resulted in early missteps since proposals have not been properly vetted and coordinated
Unlike previous, current Administration is not bound by conventional wisdom (Cabinet selections weren’t chosen to please constituency; media isn’t invited to certain events; etc.)

8. Current Policy Landscape
Current Republican party has largely been born out of the “Tea Party” movement – highly conservative, bordering on libertarian. Acted as minority party.
Largely able to get their agenda through the House and (to a certain degree) the Senate. But never able to get bills signed into law
With unified Republican control, the party has a major opportunity to reshape the nation’s policy agenda. But quickly finding out that there are major challenges – including their President.

9. Current Policy Landscape
Early 2017
U.S. House - Repealing Obama-era regulations, FY 2017 budget reconciliation/healthcare reform
Senate – Confirmations of Cabinet, Supreme Court nomination, clearing what the House passes

10. Current Policy Landscape
Mid-2017
Healthcare reform (cont.), FY 2017 appropriations, begin FY 2018 budget and approps, debt ceiling, sub-Cabinet (Senate)

11. Current Policy Landscape
Late-2017
FY 2018 budget reconciliation/ tax reform (and student loans?), FY 2018 approprs, infrastructure package, Higher Education Act (?)
At some point, members will run out of “band-with” to cast hard votes

12. Current Policy Landscape
Major interest from Congress, Administration, think-tanks, trade associations, consumer groups, etc. for higher education reform
Growing consensus on the main problems and challenges with the higher education system
“How do you promote college access AND completion?”
“How do you improve institutional quality and hold institutions accountable?”
“How do you make college more affordable?”
“How do you get the private sector back into student lending?”

13. Current Policy Landscape
But no consensus on the role of the federal government to provide solutions to address these challenges
Higher education, including financing, is a high-profile issue
More players in higher education policy than in past (ED, CFPB, Treasury, consumer groups, etc.)

14. Current Policy Landscape – House HEA Reauthorization Process
Completed hearing process in the 113th and 114th Congress, held total of 15 hearings
But new Chairs, new Ranking Members, and new members have re-started the hearing process (last Tuesday’s hearing on financial aid simplification)
Introducing a series of narrowly-tailored, bipartisan bills (more transparency, more loan counseling, simplifying the FAFSA, etc.)
But one comprehensive bill coming later – and it won’t be bipartisan
Wildcard: Will Republicans own Direct Lending? Where is the Trump Administration on higher education?

15. Current Policy Landscape – Senate HEA Reauthorization Process
Largely completed hearing process in the 114th Congress
With same Chair, Ranking Member, and members, likely to be a few hearings but not a lot
Likely to resurrect its process to break into various groups focused on financial aid, deregulation, sexual assault, etc.
Republicans are focused on simplification and deregulation, including turning the Task Force on Higher Education Regulation recommendations (i.e. preferred lender list requirements) into legislation, and risk-sharing
Democrats have their own wish-lists, Murray to address homeless children, Gillebrand to address campus safety, etc.
Wildcard: Will Democrats, including Sen. Elizabeth Warren, fight or work together?

16. Current Policy Landscape
With many moving parts, can consensus be achieved?
Accreditation reform
Automatic payroll deduction
Borrower defenses to repayment
Capping Grad/Parent PLUS
Competency-based education
Debt-free college
Federal-state partnership
Federal student data system
Financial education/literacy
Gainful employment for all schools
Income share agreements
One loan, one grant program
“Pell-Well” concept
Private loan regulation
Public service loan forgiveness
Repayment rates v. default rates
Risk-sharing proposals
Sexual abuse protections
Simplifying repayment plans
Student loan servicing changes
Teacher preparation improvements
Year-Round Pell Grants
90-10 and other prop school issues

17. Current Policy Landscape – Action is Still with Budget and Appropriations
Bipartisan Budget Act of Amended TCPA to authorize the use of predictive dialer technology to collect a debt owed to or guaranteed by the United States
Consolidated Appropriations Act, Amended the Higher Education Act to increase from 95 to 100 percent reinsurance payments on default claims paid by guaranty agencies to lenders
Consolidated Appropriations Act, Amended the Higher Education Act to extend authority for Account Maintenance Fees
Consolidated Appropriations Act, Allocated loan volume to federal student loan servicers on performance and capacity
Further Continuing and Security Assistance Appropriations Act, 2017 – Amended the Higher Education Act to extend authority for Account Maintenance Fees
House Labor/HHS/ED Appropriations Act, Require the Department of Education to put in place a plan under which it will give credit for subcontracting with small businesses, including state-based nonprofit organizations with expertise in assisting borrowers

18. Current Policy Landscape – Action is Still with Budget and Appropriations
House Labor/HHS/ED Appropriations Act, Require the Department of Education to put in place a plan for how it intends to implement the third-party servicer requirements
Senate Labor/HHS/ED Appropriations Act, Require the Department of Education to allow all of its federal student loan servicers to offer consolidation loans
But the Administration is quickly becoming another avenue for NCHER members to accomplish their priorities….
Withdrawal of Dear Colleague Letter on collection costs

19. Promoting Tax-Exempt Financing (non-HEA)
Preserve tax-exempt financing of education loans in any tax reform package
Support H.R. 480, the “Student Loan Opportunity Act” to update Section 150(d)
Repeal the Alternative Minimum Tax
Clarify IRS guidance on refunding bonds

20. Leveraging Technology to Help Struggling Borrowers (non-HEA)
Oppose the HANG UP Act to repeal the recent changes to the Telephone Consumer Protection Act
Urge the Federal Communications Commission to reconsider its final rules and strike a more appropriate balance between protecting and helping borrowers

21. Reducing Burdensome Federal Regulations
Repeal the preferred lender list restrictions
Rescind the Dear Colleague Letter on collection costs (Done)
Allow state grant agencies to have access to the school list order

22. Expanding Access to Loan Rehabilitation
Allow defaulted borrowers to rehab their student loans more than once – w/ conditions?
Allow access to the National Directory of New Hires and the National Student Loan Data System so servicers and guaranty agencies can provide counseling and repayment options to borrowers

23. Streamlining Repayment and Preventing Overborrowing
Streamline the myriad of repayment plans to help students and family borrowers
Improve the annual recertification process for borrowers in Income-Driven repayment plans
Simplify the FAFSA to reduce the number of questions and length of time required to complete the form

24. Streamlining Repayment and Preventing Overborrowing
Provide authority to financial aid administrators to low annual and aggregate loan limits
Consider capping the amount parents can borrow under the PLUS program

25. Helping Students Make Smart Postsecondary Decisions
Provide pre-college, in-school, and post-college financial education and debt management services to students, borrowers, and families
Strengthen existing entrance and exit counseling
Promote the use of 529 plans

26. Providing an Orderly Wind-Down of the Federal Guaranteed Program
Authorize the payment of Account Maintenance Fees through 2026
Provide just-in-time reinsurance payments
Remove the 45% cap on recoveries through Federal Consolidation Loans

27. Providing an Orderly Wind-Down of the Federal Guaranteed Program
Develop a specific process for those guaranty agencies interested in relinquishing their FFELP portfolios, and the criteria and process the Department will use when selecting successor agencies

28. Promoting Better Loan Servicing
Review the current procurement to identify necessary changes to the policies and approaches that will improve federal student loan servicing
Promote the use of state and nonprofit organizations with expertise in helping borrowers

29. Promoting Better Loan Servicing
Ensure there are common performance metrics across all servicers
Ensure federal law and contractual requirements preempt state and local rules that impact federal student loan servicing

30. Promoting the Availability of Private Loans
Mandate that borrowers receive accurate disclosures of the costs of their loans
Permit private lenders to remove the default record upon the rehabilitation of a private loan

31. Leveraging Private Sector Participation in the Federal Program
Require federal agencies to use Fair-Value Accounting when measuring the true costs of federal credit programs
Enhance the role of private capital and local expertise – led by state and nonprofit lenders, holders, servicers, and collectors – in financing the cost of college and administering education loans

32. Thank you! Any Questions?